Gold gains to a two-month high

London. — Gold climbed to the highest in more than two months in London as bullion exchange-traded product sales slowed and amid political tension over Syria. Bullion-backed exchange-traded product holdings increased for a second successive week last week, narrowing this year’s drop to 26 percent, data compiled by Bloomberg show. Crude oil futures rose for the third day in four in New York after the US said it will hold Syria’s government accountable for the use of chemical weapons.

Gold slid 16 percent this year as some investors lost faith in the metal as a store of value and on speculation the US Federal Reserve will reduce stimulus that helped prices gain for a 12th year in 2012. The metal rebounded from a 34-month low of US$1 180,50 an ounce in June as lower prices boosted demand for jewellery, coins and bars.

“The fact that investment demand has picked up again somewhat of late, coupled with the escalating Syrian conflict, could see the upswing continue,” analysts at Commerzbank AG wrote yesterday in a report.

Gold for immediate delivery rose 0,4 percent to US$1 410,45 an ounce in London. Prices reached US$1 412,75, the highest since June 7. Bullion for December delivery was up 1,2 percent at US$1 410.20 on the Comex in New York. Futures trading volume was about the average for the past 100 days for this time of day, data compiled by Bloomberg showed.

Central bank purchases compensated for some of the sales from ETPs. Russia and Kazakhstan expanded their gold reserves for a 10th straight month in July, data on the International Monetary Fund’s website show. Azerbaijan, the Kyrgyz Republic and Guatemala also added to reserves in July, the IMF data show.

President Barack Obama will hold the Syrian government accountable for the “indiscriminate slaughter” of its own people with chemical weapons last week, US Secretary of State John Kerry said.

Gold prices that rose in six of the past seven weeks pushed the metal’s so-called relative-strength index to 69,9 yesterday, nearing the level of 70 that suggests the price may be set to decline.

Silver for immediate delivery fell 0,1 percent to US$24,2845 an ounce in London, after reaching US$24,4153 on Monday, the highest since May 6. Platinum reached US$1 554,75 an ounce, the highest since April 9, and was last little changed at US$1 547,04. Palladium was 0,2 percent lower at US$747,25 an ounce. — Bloomberg.